DTL reports 7% increase in first quarter net profit attributable to shareholders

May 13, 2022

Derrimon Trading Limited (DTL), for the three months ended March 31, 2022, reported trading income of $4.24 billion compared to the $4.01 billion booked for the prior year’s comparable period, a 6% increase. This is as a result of, “The results include all subsidiaries of Derrimon Trading Company Limited . The impact from the present economic climate continue to affect the outturn of all our operations as reflected in this first quarter’s report. The global economic slowdown, as reported in many sectors, negatively impacted revenues in some of our business.”

Cost of sales increased by 5% to $3.44 billion for the period (2021: $3.26 billion). As a result, Gross profit amounted to $803.21 million relative to $751.73 million for the prior comparable period, an increase of 7% year over year.

Other income for the period under review rose significantly by 495% to close the quarter at $135.57 million relative to $22.77 million booked in the prior comparable period.

Total operating expenses totalled $657 million for the period under review, representing a growth of 14% on the $574.76 million recorded in the prior year’s corresponding quarter. Of this, Administrative expenses amounted to $539.43 million, 14% higher when compared to the $473.86 million in 2021. Selling and distribution expenses recorded a 17% increase for the quarter, totalling $117.56 million (2021: $100.90 million).

According to DTL “The major factors for this increase were salaries, utilities, and distribution costs inclusive of trucking costs. We continue to examine some of these costs and will implement specific strategies in order to reduce the impact of them.”

For the quarter, finance cost closed at $84.08 million versus $23.24 million in 2021. According to DTL, “The full adoption of IFRS 16 reflects the accounting for leases and the desired treatment
for foreign exchange movement in these leases, hence now being reported in finance charges.”

Consequently, profit before taxation grew to $197.70 million compared to $176.50 million in 2021. After incurring tax charges of $24.71 million (2021: $15.90 million), net profit amounted to $172.99 million, an 8% increase when compared to $160.61 million reported for the first quarter of 2021. Net profit attributable to shareholders amounted to $165.24 million compared to $154.17 million recorded in 2021.

Earnings per share (EPS) for the quarter closed the period at $0.036 (2021: $0.034), The twelve months trailing earnings per share amounted to $0.091. The total number of shares used in the computation amounted to 4,533,360,670 units. Notably, DTL closed the trading period on May 13, 2022 at a price of $3.29 with a corresponding P/E of 36.29 times.

DTL highlighted that, “with the recent relaxing of the Covid-19 measures including the withdrawal of the Disaster Risk Management Act (DRMA), we are experiencing a gradual increase in economic activities and commerce. The reopening of many sectors will positively influence our operations and provide that platform for the implementation of our Annual Business Plan within some semblance of normalcy. Subsequent to the quarter, we completed the acquisition of Arosa Limited on April 6. Production is being ramped up for both Spicy Hills Farms and Arosa Limited which will provide additional products to both our distribution and retail business locally and overseas.”

Balance Sheet Highlights:

As at March 31, 2022, the Company’s assets totaled $12 billion (2021: $9.29 billion), 29% more than its value as at March 31, 2021. This was largely due to increases in ‘Fixed assets’ and ‘Intangible assets’ amounting to $2.44 billion (2021: $576.03 million) and $1.65 billion (2021: $438.64 million), respectively.

Total Shareholders’ Equity totalled $5.72 billion (2021: $5.30 billion), which translated to a book value of $1.26 (2021: $1.17).


Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.